Relationship and difference between rent-seeking and corruption in public economics

The connection and difference between rent-seeking and corruption;

Rent-seeking and corruption are always two different concepts. First of all, their actors are different. Corruption is always associated with certain power. Not everyone can become a "corrupt person". Only those who have power in their hands have the possibility of corruption. In the process of trading power and money, the supply side of the electricity market is officials, the demand side is interest groups as rent-seekers, and the equilibrium price is rent price. Rent-seekers exchange money or goods for power that already exists in the hands of corrupt people, or power set for profit. After the exchange activities, "money" and "power" are translocated, and the rent-seekers get the power guarantee that can bring them greater benefits, while the corrupt people satisfy their desires through transactions. Corruption and rent-seeking actors constitute the supply and demand sides of the rights product market. In addition, it should be noted that rent-seeking activities do not necessarily lead to waste of resources, which is the biggest difference between rent-seeking and corruption. Rent-seeking activities can take legal or illegal forms. Legal activities, such as enterprises seeking preferential treatment from the government and using special policies to maintain their exclusive monopoly position. Illegal behavior is like bribery. A large number of empirical facts tell us that if the purpose of rent-seeking activities is to change the inefficient property right structure and promote the change of the existing property right distribution mode, then the result of this change may be a meaningful or ideal result for society. The most obvious example is the formation of patent protection system. Inventors establish patent system protection by lobbying the government. In order to obtain the monopoly right of patent achievements in a certain period of time. This process can not be regarded as a waste of resources, but the price that scientific and technological progress must pay. If a huge amount of capital is invested in inventions, everyone can copy the results, inventors will not enjoy the monopoly profits brought by their inventions in a certain period of time, and inventors will lose the interest incentive of development and creation, and the activities of inventions will be ignored, which will ultimately affect the progress of science and technology and the improvement of social welfare. It can be seen that rent-seeking activities do not necessarily mean waste of resources. However, corruption is different. It not only desecrates public trust and damages social equity, but also erodes social capital, wastes resources and reduces efficiency. Its harm cannot be ignored. According to the estimation of relevant people, in the second half of the 1990s, the economic losses and consumer welfare losses caused by various corrupt behaviors reached an average of 987.5 ~1257 billion yuan per year, accounting for 13.2%~ 16.8% of the national GDP. In a sense, reform can be said to be a competition between efficiency and corruption.